Forex Market Updates & Commentary |  |
- Bernanke’s written text to Congress on the Fed Exit strategy
- GBPUSD has been under pressure. Trades below 100 hour MA
- Forex Morning Report - Feb 10
- FXDD Online Training Thursday Feb 11 Register
- Rebroadcast of Tuesday Feb 9th 2010 Online Training
- EURUSD dominated by the twists and turns from the Greece situation
- USDJPY moves lower on higher Trade Deficit
- US Trade Deficit comes in at -40.2 billion. Worse than expectations
- Germany official on newswires regarding decision on Greece. No decision and no decision pending on Greece
- Bobbys Corner-Open Market-Feb.10.2010
- BoE Cuts GDP forecast
- Germany sympathetic to Greece
- UK Manufacturing & Industrial Production stronger than expected
- 2-10 Economic Calendar
- JPY Core Machinery Orders
| Bernanke’s written text to Congress on the Fed Exit strategy Posted: 10 Feb 2010 07:08 AM PST http://www.federalreserve.gov/newsevents/testimony/bernanke20100210a.htm The Fed would use the rate paid on excess reserves deposited at the Fed to encourage banks to slow lending by being able to earn more on reserves at the Fed. This would take over as the main way to conduct monetary policy, superceding the targeting of Fed Funds which has become less effective tool in controlling short term rates. | |||||||||||||||||||||
| GBPUSD has been under pressure. Trades below 100 hour MA Posted: 10 Feb 2010 06:51 AM PST
The GBPUSD is trading below the 100 hour MA after spiking higher earlier on the back of better economic data. The BOE Inflation Report sent the pair back down however, as they lowered inflation and growth expectations. This led to speculation that the central bank would have to pump more money into the system. The BOE paused the 200 billion asset purchase program but may have to reinstate the measures in the future given the forecast. Of concern as well is the election in May which has the Conservatives as the favorites over the Labor Party. The Conservatives are expected to tighten fiscal policy further in their budget which would put even more pressure on the economy. This too should keep pressure on the pound. From a technical perspective the price is back below the 100 hour MA at the 1.5662 level. This is upside resistance today. The moving average is still sloped to the downside and should keep pressure on the price. Additional resistance comes in at 1.5689. The next target below is the 1.5556 level where there are a number of hourly bar lows over the last 3 trading days. The low for 2010 comes in at 1.5533 and will be the next target. Below that level is the 1.5448 which is the low price from May 20, 2009.
Longer term a move toward the 50% retracement of the 2009 low to high range comes in at the 1.5272 level. | |||||||||||||||||||||
| Posted: 10 Feb 2010 06:29 AM PST | |||||||||||||||||||||
| FXDD Online Training Thursday Feb 11 Register Posted: 10 Feb 2010 06:28 AM PST
Sign up here for Thursday’s Online Class Register Now | |||||||||||||||||||||
| Rebroadcast of Tuesday Feb 9th 2010 Online Training Posted: 10 Feb 2010 06:28 AM PST Here is the link to watch the rebroadcast of FXDD’s Tuesday Online Training on setting up Metatrader 4 for maximum trading performance - Watch it now | |||||||||||||||||||||
| EURUSD dominated by the twists and turns from the Greece situation Posted: 10 Feb 2010 06:17 AM PST
Needless to say there is many crosswinds from the EU/Greece situation. The Pavlovian reaction is if there is a bailout, the EURUSD goes up. No bailout the EURUSD goes down. What happens after a final decision - which brings into the forefront the moral hazard debate- is what is of a concern for traders. For me, the risks are increased measurably and as we saw yesterday the sudden risks can be very dangerous and above all increase fear which we all know is a traders worst enemy. So staying on the sidelines until the dust settles is the best course of action. EIther that or lowering trade amounts and using stops. Having said that, there are levels we can map out that are similar to the levels chosen prior to the release of a key economic report like the US Unemployment report. Looking at the charts, the key level to watch on the topside is the 200 hour moving average. This level is currently at the 1.3819 level. The market has gotten within 8 or so pips of this level on 3 occasions in the last 6 trading days but has not been able to extend above this moving average level. A move above should lead to further upside momentum with 1.3858 as the next upside target. On the downside, the first key level is the 100 hour MA at the 1.3717 level. Below that level is 1.3684 support and then 1.3642 (low from yesterday) and 1.3619 the double bottom from Monday’s trade. I would think the risk is to the downside but one never knows how the market is likely to react. So be patient but be skeptical. The markets are not all that conducive to logical trade lately. Plus we also have the Bernanke testimony notes which has the potential to cause some additional volatility today. The Chirmans comments are scheduled to be released at 10 a.m. Eastern time, and are to unveil the central bank’s strategy to exit from its ultra-easy monetary policy. | |||||||||||||||||||||
| USDJPY moves lower on higher Trade Deficit Posted: 10 Feb 2010 05:40 AM PST
The higher US Trade Deficit has led to a fall in the USDJPY. The price has moved below the trendline support and the 100 hour MA at the 89.53 level. These levels will now become upside resistance levels for the pair. Yesterday’s low was 89.15. This will be a target on the downside for the pair. It also was low levels from Monday’s trade as well (89.13 was the low on Monday). | |||||||||||||||||||||
| US Trade Deficit comes in at -40.2 billion. Worse than expectations Posted: 10 Feb 2010 05:32 AM PST Comes in at -$40.2 billion vs –$36 billion estimated. The number was delayed in reporting. Exports $142.7 billion vs $138.09 billion Imports $182.88 b vs $174.48 billion The higher trade deficit is a negative for GDP and will likely trim something off 4th quarter GDP. | |||||||||||||||||||||
| Posted: 10 Feb 2010 04:58 AM PST So the EURUSD has moved lower on the news. It is getting to be a lose/lose situation it seems. If there is a bi-lateral solution through Greece, there could be further requests from Portugal, Spain, Ireland at some point. If there is no solution, the EURUSD has pressure. Now on an announcement there is likely to be a spike higher, like we saw yesterday. However, the sustainability may be difficult - all things considered. This is shaping up similar to a AIG/Lehman situation. Where does being the savior start/where does it end. What does that do to credibility. | |||||||||||||||||||||
| Bobbys Corner-Open Market-Feb.10.2010 Posted: 10 Feb 2010 04:33 AM PST
I have been away at the World Money Show in Orlando, FL- I am now back in NY with the snow falling. The USD continues to benefit from the crisis in the EuroZone. Greece is trying to work out a deal with either the EU or to get direct assistance from Germany. Greece is a major political concern for the EZ. The EZ cannot afford to allow Greece’s debt to be placed below investment grade levels, for fears that this could also effect other Southern European economies. Fed Chairman Bernanke is expected to testify before Congress today-but due to the inclement weather, his testimony may be in written form. World equity markets rose-as speculation that a “rescue package” for Greece is taking root. Oil:$73.96 Gold:$1080.70
HAVE A GREAT DAY & GOOD LUCK | |||||||||||||||||||||
| Posted: 10 Feb 2010 02:35 AM PST BoE cuts GDP forecast and says inflation to undershoot 2% target. The pound erases gains against Eur and Usd on this news. Eur/Gbp is up about 20 points to .8775 while Gbp/Usd is off about 40 points to 1.5710. | |||||||||||||||||||||
| Posted: 10 Feb 2010 02:12 AM PST Germany said to consider Greek aid beyond loan guarantees. Eur/Usd leaped from 1.3770 to 1.3805 on news. | |||||||||||||||||||||
| UK Manufacturing & Industrial Production stronger than expected Posted: 10 Feb 2010 01:38 AM PST UK Manufacturing Production m/m came in at 0.9%, stronger than the 0.3% expected. Y/Y came in at -1.9%, stronger than the -3.0% expected. Industrial Production m/m came in at 0.5%, stronger than 0.2% expected. Y/Y came in at -3.6%, stronger than the -4.1% expected. Logic would expect GBP to strengthen upon the release of strong production figures, but market may be more concerned with the BoE quarterly inflation report out in just under an hour. Gbp/Usd currently trades at 1.5705, relatively unchanged. | |||||||||||||||||||||
| Posted: 09 Feb 2010 08:26 PM PST
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| Posted: 09 Feb 2010 03:54 PM PST Core machinery orders m/m were 20.1%; much better than the forecast of 8.1% and prior reading of -11.3%. Despite the much better than expected release the JPY still trades off session lows at 89.77. | |||||||||||||||||||||
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